Exceptionally strong net immigration had kept the NZ economy out of recession and had bolstered labour market capacity, said ASB senior economist Mark Smith. But, the RBNZ was wary of the support that the big population boost was providing to domestic spending, the housing market and to inflationary pressures, he said.
“There are a number of drivers behind net migration,” he said. “We note that Australia is also experiencing very strong net immigration, with pressure across the Tasman to tighten migration settings.”
As had been the recent trend, the real story was not the monthly net inflow, said Westpac senior economist Darren Gibbs.
“The 7,810 permanent and long-term migrants were broadly in line with our expectations,” he said. “Rather, the key news was a further upward revision to estimated inflows in earlier months, with the net inflow for the year to September revised up by just over 6,000 people.”
If that trend was to continue the annual inflow was likely to set new records for a few months yet, perhaps approaching 140,000 or more, he said.
“At face value, this will concern the RBNZ, which is already worried that the favourable supply side effects of migration on the labour market could soon be swamped by unfavourable effects on demand for goods and services (including housing).”
But more importance would be how quickly the peak subsided, he said.
“Visa approvals do appear to be running at lower levels than earlier in the year, but it remains to seen how quickly this will translate into a slowdown in arrivals.”
The net migration loss of 44,500 New Zealand citizens in the October 2023 year was also provisionally a new annual record – narrowly exceeding the previous record of 44,400 in the February 2012 year.
The average annual net migration loss of New Zealand citizens was 25,200 in the October years 2002–2014, and 4,100 in the October years 2015–2019.
There have now been 19 consecutive months of net migration gains of non-New Zealand citizens - from April 2022, amounting to 203,100.
This net migration gain compares with a net migration loss of 32,300 non-New Zealand citizens in the 24 months from April 2020 to March 2022, when Covid-19-related border and travel restrictions were in place.
There has been 24 consecutive months of net migration losses of New Zealand citizens to October 2023, amounting to 67,000. This follows 27 months of mainly net migration gains of New Zealand citizens, amounting to 32,100.
Tourism arrivals recovering
Meanwhile, short term overseas visitor (tourist) arrivals were 226,000 in the October 2023 month, up 64,300 from the October 2022 month. That represented 80 per cent of the pre-Covid-19 number of 283,800 in October 2019, Stats NZ said.
The biggest changes were in arrivals from: China (up 13,900), Australia (up 7100), United States (up 6100), India (up 4400), Korea (up 3600).
Gibbs said the number of foreign tourists arriving in New Zealand fell around 8 per cent in October, interrupting an improving trend.
“Arrivals were 80 per cent of that seen in October 2019 (prior to the pandemic), whereas September arrivals had been 86 per cent of those seen in September 2019. However, with airline capacity continuing to increase, we expect that this gap will continue to close over the coming year.”
